Inside Umeme’s Shs 55 billion investments in Mbale

To address present and future growth in demand for stable and reliable electricity, in Eastern Uganda, Umeme Limited, Uganda's largest power distribution company, has invested $ 15.2 million (Shs 55.7 billion) into two major power supply quality and reliability projects in the Mbale Umeme district.

The two projects are the $ 9.23 million (Shs 34 billion) Siti 2 Project and the $ 5.99 million ( Shs 22 billion) Tangshan Mbale Industrial Park Project.

On completion, both projects will increase the Mbale Umeme district's electricity supply by 205% from the current 20 MW to 61 MW.

The Umeme district covers Mbale City as well as the local administration districts of Manafwa, Kibuku, Pallisa, Kumi, and Kapchorwa.

The Siti 2 Project has four major components namely: a 125-kilometre 33kV single circuit double poles line evacuating power from the 16.5 MW Siti 2 Hydro Power Project (HPP) on River Siti in Bukwo District.

Works on the power line are 97 percent complete, and the plant is ready to start generating power, according to Selestino Babungi, the Umeme Managing Director.

"The second component involves the construction of a switching station and plant house at Umeme's Mbale existing substation, and this component is 74 percent complete.

The third phase includes capacitor banks to stabilise power to the Mbale industrial area and is 70 per cent complete. The final component, which is 96 per cent complete involves wayleaves acquisition and the compensation of 3,242 project affected persons (PAPs)," Babungi told media on a recent tour of the project.

The Siti 2 project that commenced on 18th July 2019 was, according to Eng. Job Watti, the Umeme Project Engineer, scheduled to be finalised at the end of December 2019 but encountered some delays associated with a steep terrain and adverse weather as well as wayleaves acquisition.

These delays subsequently were worsened by Covid-19, but the project is now slated for completion by 31st August 2020.

Umeme supporting industrialisation and creation of jobs

The Tangshan Mbale Industrial Park Project includes a 75km power line, evacuating up t0 25 MW from the Tororo UETCL substation to Mbale's Sino-Uganda Mbale Industrial Park. It also consists of a 10km power distribution line within the industrial park.

To stabilise the power to meet industrial demands, Umeme is also constructing a switching station and plant house within the industrial park. The power distributor will also spend an additional $1,000,000 (Shs 3.7 billion) on compensating project affected persons.

This project that started on 7th May 2020 is scheduled for completion by the end of December 2020.

"The Mbale projects are one of our major investments for 2020 in support of government's efforts to attract industries and jobs in the eastern region," Babungi told the media.

"Having been granted city status, we expect demand in Mbale City and the surrounding areas to grow considerably fast. Current demand is about 20 MW but the industrial park alone is expected to consume 220 MW of power at full capacity. In addition to the industrial park, there is a cement factory in the pipeline in Mbale," he said.

Sitting on 619 acres, the Sino- Uganda, Mbale Industrial Park, according to the developers, looks to attract between 60-80 factories, which at peak will consume up to 220 MW of power.

Currently, eight factories have been built in the park, although four are active and use up to 3 MW of power. According to Mr Dary Lee the park's administrator, the four factories employ 1,500 Ugandans.

"Industrial parks are the future of industrialisation in Uganda because they guarantee a lower cost of production per unit.

The Mbale Industrial park particularly because of its proximity to the Kenyan border and subsequently the Mombasa Port, is strategic for both import substitution and export-based factories," Babungi said during the tour.

Godfrey Bwire, the Umeme Customer Services Engineer, Networks said that while previously electricity demand in Mbale had grown at an average 1 per cent annually, in 2019 alone, demand had jumped by 5 per cent.

Over and above the 61 MW projected by the end of December 2020, additional capacity to the industrial park will come from a UETCL transmission substation planned for 2021.

Umeme investing UGX310 bn to stabilise power and feed growing demand nationwide

The Mbale investment is part of Umeme's $ 83.3 million (Shs 310 billion) investment plan to increase grid connections and improve power reliability.

The 2020 investment plan is itself part of Umeme's larger USD450m (Shs1.7 trillion) 2019-2025 investment plan in support of the government's Electricity Connections Policy 2018-2027, which targets to increase access to electricity from the current 28 per cent to 60 per cent by 2027 and subsequently 80 per cent by 2040.

The Shs 310 billion is being invested in six core areas, namely:

• Addressing energy losses and improving operational efficiency at a cost of USD26.89 million;
• Addressing load demand growth at a cost of $22.72 million;
• Improving power supply reliability at $18.89 million;
• Evacuation and supply of electricity from various generation facilities across the country at $10.79 million;
• Network systems automation at $1.93 million and;
• Network protection and security at $2.06 million.

Umeme in 2020 increased its network investments by 7.2 per cent from the Shs 289 billion it spent in 2019. Cumulatively, Umeme has to date invested $656 million into Uganda's power distribution network, increasing the number of customers by 1,210,000 from the 290,000 it inherited in 2005 to now over 1,500,000 customers. The investments have also reduced power losses from 38% as of 2005 to 16.4% as of 2019.

In 2019 alone, Umeme connected 180,000 new customers, 178,152 of whom financed by the Government of Uganda and development partners under the Electricity Connections Policy.